Where a contract grows immediately out of and is connected with
an illegal or immoral act, a court of justice will not lend its aid
to enforce it.
So if the contract be in part only connected with the illegal
consideration and growing immediately out of it, though it be in
fact a new contract, it is equally tainted by it. But if the
promise be entirely disconnected with the illegal act and is
founded on a new consideration, it is not affected by the act,
although it was known to the party to whom the promise was made,
and although he was the contriver and conductor of the illegal
act.
Thus, where A, during a war, contrived a plan for importing
goods on his own account from the enemy's country, and goods were
sent to B by the same vessel, A, at the request of B, became surety
for the payment of the duties on B's goods and became responsible
for the expenses on a prosecution for the illegal importation of
the goods and was compelled to pay them,
held that A might
maintain an action on the promise of B to refund the money.
But if the importation is the result of a scheme between the
plaintiff and defendant or if the plaintiff has any interest in the
goods or if they are consigned to him with his privity in order
that he may protect them for the owner, a promise to repay any
advances made under such understanding or agreement is utterly
void.
General principle as to illegality of contracts, and
distinctions by which it is limited.
The authorities on this subject reviewed.
Inconvenience of the practice of bringing the whole evidence,
instead of the facts, for review before this Court.
The party cannot, by such a practice, take advantage of any
omission in the judge's charge under a general exception to it. If
he wishes the instruction of the court to the jury on any point
omitted in the charge, he must suggest it and request the judge's
opinion on it.
This was an action of assumpsit, brought by the defendant in
error, Toler, against the plaintiff in error, Armstrong, to recover
a sum of
Page 24 U. S. 259
money paid by Toler on account of goods, the property of
Armstrong and others, consigned to Toler which had been seized and
libeled in the District Court of Maine in the year 1814 as having
been imported contrary to law. The goods were shipped during the
late war with Great Britain at St. Johns, in the Province of New
Brunswick, for Armstrong and other citizens and residents of the
United States and consigned to Toler, also a domiciled citizen of
the United States. The goods were delivered to the agent of the
claimants on stipulation to abide the event of the suit, Toler
becoming liable for the appraised value, and Armstrong's part of
the goods was afterwards delivered to him on his promise to pay
Toler his proportion of any sum for which Toler might be liable
should the goods be condemned. The goods having been condemned,
Toler paid their appraised value and brought this action to recover
back from Armstrong his proportion of the amount. At the trial of
the cause, the defendant below resisted the demand on the principle
that the contract was void as having been made on an illegal
consideration. When the testimony on the part of the plaintiff
below was concluded, the counsel for the defendant insisted on his
behalf to the court that the several matters propounded and given
in evidence on the part of the plaintiff were not sufficient, and
ought not to be allowed as decisive evidence to entitle the
plaintiff to maintain the issue, and to recover against the
defendant. The judge
Page 24 U. S. 260
thereupon delivered the following charge to the jury, which is
spread at large upon the record.
"The rule of law under which the defendant seeks to shelter
himself against a compliance with his contract to indemnity the
plaintiff for all sums which he might have to pay on account of the
goods shipped from New Brunswick for the defendant and consigned to
the plaintiff is a salutary one founded in morality and good
policy, and which recommends itself to the good sense of every man
as soon as it is stated. The principle of the rule is that no man
ought to be heard in a court of justice who seeks to enforce a
contract founded in or arising out of moral or political turpitude.
The rule itself has sometimes been carried to inconvenient lengths,
the difficulty being not in any unsoundness in the rule itself, but
in its fitness to the particular cases to which it has been
applied. Does the taint in the original transaction infect and
vitiate every contract growing out of it, however remotely
connected with it? This would be to extend the rule beyond the
policy which produced it, and would lead to the most inconvenient
consequences; carried out to such an extent, it would deserve to be
entitled a rule to encourage and protect fraud. So far as the rule
operates to discourage the perpetration of an immoral or illegal
act, it is founded in the strongest reason, but it cannot safely be
pushed further. If, for example, the man who imports goods for
another by means of a violation of the laws of his country is
disqualified from
Page 24 U. S. 261
founding any action upon such illegal transaction for the value
or freight of the goods or other advances made on them, he is
justly punished for the immorality of the act, and a powerful
discouragement from the perpetration of it is provided by the rule.
But after the act is accomplished, no new contract ought to be
affected by it; it ought not to vitiate the contract of the retail
merchant who buys these goods from the importer, that of the tailor
who purchases from the merchant, or of the customers of the former
amongst whom the goods are distributed in clothing, although the
illegality of the original act was known to each of the above
persons at the time he contracted."
"I understand the rule as now clearly settled to be that where
the contract grows immediately out of and is connected with an
illegal or immoral act, a court of justice will not lend its aid to
enforce it. And if the contract be in part only connected with the
illegal transaction and growing immediately out of it, though it be
in fact a new contract, it is equally tainted by it. The case
before supposed of an action for the value of goods illegally
imported for another or freight and expenses attending, founded
upon a promise express or implied, exemplifies a part of the above
rule; the latter part of it may be explained by the following case:
as if the importation was the result of a scheme to consign the
goods to the friend of the owner, with the privity of the former
that he might protect and defend them for the owner in case they
should be brought
Page 24 U. S. 262
into jeopardy, I should consider a bond or promise afterwards
given by the owner to his friend to indemnify him for his advances
on account of any proceedings against the property or otherwise to
constitute a part of the
res gesta or of the original
transaction, though it purports to be a new contract. For it would
clearly be a promise growing immediately out of and connected with
the illegal transaction. It would be, in fact, all one transaction,
and the party to whom the promise was made would by such a
contrivance contribute in effect to the success of the illegal
measure."
"But if the promise be unconnected with the illegal act and is
founded on a new consideration, it is not tainted by the act,
although it was known to the party to whom the promise was made and
although he was the contriver and conductor of the illegal act.
Thus, if A. should, during war, contrive a plan for importing goods
from the country of the enemy on his own account by means of
smuggling or of a collusive capture, and in the same vessel should
be sent goods for B., and A. should, upon the request of B., become
surety for payment of the duties or should undertake to become
answerable for expenses on account of a prosecution for the illegal
importation, or should advance money to B. to enable him to pay
those expenses, these acts constituting no part of the original
scheme, here would be a new contract upon a valid and legal
consideration, unconnected with the original act although remotely
caused by it, and such contract
Page 24 U. S. 263
would not be so contaminated by the turpitude of the offensive
act as to turn A. out of court when seeking to enforce it, although
the illegal introduction of the goods into the country was the
consequence of the scheme projected by A. in relation to his own
goods."
"Whether the plaintiff has any interest in the goods imported by
the defendant from New Brunswick or was the contriver of or
concerned in a scheme to introduce these goods, or even his own, if
he had any, into the United States by means of a collusive capture
or otherwise, or consented to become the consignee of the
defendant's goods with a view to their introduction are questions
which must depend upon the evidence, of which you must judge. It
ought, however, to be remembered that it would seem from the
letters of introduction of the defendant to the plaintiff sometime
after this importation had taken place that these gentlemen were,
at that time, strangers to each other."
And the jurors having submitted to the court an inquiry, in the
words following,
viz.,
"The jury beg leave to ask the judge whether Toler must have an
interest in Armstrong's goods to constitute him a participator in
the voyage? If simply having goods on board will constitute him
such?"
The court gave its opinion upon the same as follows:
"The plaintiff simply having goods on board would not constitute
him a participator or affect the contract with the defendant. Being
interested in the goods would."
This charge was excepted to by the defendant,
Page 24 U. S. 264
and a verdict having been found for the plaintiff, on which a
judgment was rendered in his favor, the cause was brought by writ
of error to this Court.
Page 24 U. S. 267
MR. CHIEF JUSTICE MARSHALL delivered the opinion of the Court,
and, after stating the case, proceeded as follows:
The only point moved by the defendant's counsel to the court was
that the evidence was not decisive in favor of the plaintiff. The
court gave this opinion. The charge does not intimate that the
testimony was conclusive, but leaves the case to the jury to be
decided by it under the control of certain legal principles which
are stated in the charge. To entitle the plaintiff in error to a
judgment of reversal, he must show that some one of these
principles is erroneous to his prejudice.
The main object of the charge is to state to
Page 24 U. S. 268
the jury the law of contracts on an illegal consideration so far
as it was supposed to bear on the case before it. To enable it to
apply the law to the facts, the court supposed many cases in which
the contract would be void, the consideration being illegal. It is
unnecessary to review this part of the charge, because it is
entirely favorable to the plaintiff in error.
After having stated the law to be that where the contract grows
immediately out of an illegal act, a court of justice will not
enforce it, the court proceeds to say
"But if the promise be unconnected with the illegal act and is
founded on a new consideration, it is not tainted by the act,
although it was known to the party to whom the promise was made and
although he was the contriver and conductor of the illegal act.
Thus, if A. should, during war, contrive a plan for importing goods
from the country of the enemy on his own account by means of
smuggling or of a collusive capture, and goods should be sent in
the same vessel for B., and A. should, upon the request of B.,
become surety for the payment of the duties or should undertake to
become answerable for the expenses on account of a prosecution for
illegal importation, or should advance money to B. to enable him to
pay those expenses, these acts constituting no part of the original
scheme, here would be a new contract upon a valid and legal
consideration unconnected with the original act, although remotely
caused by it, and such contract would not be so contaminated by the
turpitude of the offensive act as
Page 24 U. S. 269
to turn A. out of court when seeking to enforce it, although the
illegal introduction of the goods into the country was the
consequence of the scheme projected by A. in relation to his own
goods."
If this opinion be contrary to law, the judgment ought to be
reversed. The opinion is that a new contract, founded on a new
consideration although in relation to property respecting which
there had been unlawful transactions between the parties, is not
itself unlawful. This general proposition is illustrated by
particular examples, and will be best understood by considering the
examples themselves. The case supposed is that A., during a war,
contrives a plan for importing goods on his own account from the
country of the enemy, and that goods are sent to B. by the same
vessel. A., at the request of B., becomes surety for the payment of
the duties which accrue on the goods of B., and is compelled to pay
them; can he maintain an action on the promise of B. to return this
money? The opinion is that such an action may be sustained. The
case does not suppose A. to be concerned or in any manner
instrumental in promoting the illegal importation of B., but to
have been merely engaged himself in a similar illegal transaction,
and to have devised the plan for himself which B. afterwards
adopted. This illustration explains what was meant by the general
words previously used, which, unexplained, would have been
exceptionable.
The contract made with the government for
Page 24 U. S. 270
the payment of duties is a substantive independent contract,
entirely distinct from the unlawful importation. The consideration
is not infected with the vice of the importation. If the amount of
duties be paid by A. for B., it is the payment of a debt due in
good faith from B. to the government, and if it may not constitute
the consideration of a promise to repay it, the reason must be that
two persons who are separately engaged in an unlawful trade can
make no contract with each other -- at any rate no contract which
in any manner respects the goods unlawfully imported by either of
them. This would be to connect distinct and independent
transactions with each other and to infuse into one which was
perfectly fair and legal in itself the contaminating matter which
infected the other. This would introduce extensive mischief into
the ordinary affairs and transactions of life not compensated by
any one accompanying advantage.
The same principle, diversified in form, is illustrated by
another example. If A. should become answerable for expenses on
account of a prosecution for the illegal importation or should
advance money to B. to enable him to pay those expenses, these
acts, the court thought, would constitute a new contract the
consideration of which would be sufficient to maintain an
action.
It cannot be questioned that however strongly the laws may
denounce the crime of importing goods from the enemy in time of
war, the act of defending a prosecution instituted in
consequence
Page 24 U. S. 271
of such illegal importation is perfectly lawful. Money advanced
then by a friend in such a case is advanced for a lawful purpose,
and a promise to repay it is made on a lawful consideration. The
criminal importation constitutes no part of this consideration.
It is laid down with great clearness that if the importation was
the result of a scheme between the plaintiff and defendant, or if
the plaintiff had any interest in the goods, or if they were
consigned to him with his privity that he might protect and defend
them for the owner, a bond or promise given to repay any advances
made in pursuance of such understanding or agreement would be
utterly void.
The questions whether the plaintiff had any interest in the
goods of the defendant or was the contriver of or concerned in a
scheme to introduce them, or consented to become the consignee of
the defendant's goods with a view to their introduction, were left
to the jury. The point of law decided is that a subsequent
independent contract founded on a new consideration is not
contaminated by the illegal importation, although such illegal
importation was known to Toler when the contract was made, provided
he was not interested in the goods and had no previous concern in
their importation.
Questions upon illegal contracts have arisen very often both in
England and in this country, and no principle is better settled
than that no action can be maintained on a contract the
consideration of which is either wicked in itself or
Page 24 U. S. 272
prohibited by law. How far this principle is to affect
subsequent or collateral contracts the direct and immediate
consideration of which is not immoral or illegal is a question of
considerable intricacy, on which many controversies have arisen and
many decisions have been made. In
Faikney v. Reynous, 4
Burr. 2069, the plaintiff and one Richardson were jointly concerned
in certain contracts prohibited by law on which a loss was
sustained, the whole of which was paid by the plaintiffs, and a
bond was given for securing the repayment of Richardson's
proportion of the loss. To a suit on this bond the defendants
pleaded the statute prohibiting the original transaction, but the
court held on demurrer that the plaintiff was entitled to recover.
Although this was the case of a bond, the judgment does not appear
to have turned on that circumstance. Lord Mansfield gave his
opinion on the general ground that if one person apply to another
to pay his debt (whether contracted on the score of usury or for
any other purpose), he is entitled to recover it back again. This
is a strong case to show that a subsequent contract, not
stipulating a prohibited act although for money advanced in
satisfaction of an unlawful transaction, may be sustained in a
court of justice. In a subsequent case, 6 Term 410, Ashhurst, J.
said the defendants were held liable because they had voluntarily
given another security.
In the case of
Petrie v. Hannay, 3 Term 418, the
Page 24 U. S. 273
testator of the plaintiffs was engaged with the defendant and
others in stock transactions which were forbidden by law on which
considerable losses had been sustained which were paid by Portis,
their broker. Keeble repaid the broker the whole sum advanced by
him except 84 pounds, which was, in part, the defendant's share of
the loss, for which Keeble drew a bill on the defendant, which was
accepted. The bill not being paid, a suit was brought upon it by
Portis against the executors of Keeble, and judgment obtained, they
not setting up the illegal consideration. The executors brought
this action to recover the money they had paid, and it was held by
three judges against one, on the authority of
Faikney v.
Reynous, that the plaintiffs could maintain their action. A
distinction was taken in cases where money was paid by one person
for another on an illegal transaction by which the parties were not
bound, between a voluntary payment, and one made on the request of
the party, between an assumpsit raised by operation of law and an
express assumpsit. Although the former would not support the
action, it was held that the latter would.
This also is a strong case to show that a new contract by which
money is advanced at the request of another or, which is the same
thing, where there is an express promise to pay may sustain an
action although the money was advanced to satisfy an illegal
claim.
In
Farmer v. Russell, 1 Bos. & Pull. 295,
Page 24 U. S. 274
it was held that if A. is indebted to B. on a contract forbidden
by law and pays the money to C. for the use of B., a court will
give judgment in favor of B. against C. for this money. In this
case, B. could not have recovered against A., but when the money
came into the hands of C., a new promise was raised on a new
consideration which was not infected by the vice of the original
contract. In this case, Chief Justice Eyre said that the
plaintiff's demand arose simply from the circumstance that money
was put into the hands of C. for his use, and Justice Buller said
that the action did not arise upon the ground of the illegal
contract. Yet in this case, A.'s original title to the money was
founded on an unlawful contract, and he could not have maintained
an action against B.
The general proposition stated by Lord Mansfield in
Faikney
v. Reynous that if one person pay the debt of another at his
request, an action may be sustained to recover the money although
the original contract was unlawful goes far in deciding the
question now before the Court. That the person who paid the money
knew it was paid in discharge of a debt not recoverable at law has
never been held to alter the case. A subsequent express promise is
undoubtedly equivalent to a previous request.
In most of the cases cited by the counsel for the plaintiff in
error, the suit has been brought by a party to the original
transaction or on a contract so connected with it as to be
inseparable from it. As where a vendor in a foreign
Page 24 U. S. 275
country packs up goods for the purpose of enabling the vendee to
smuggle them, or where a suit is brought on a policy of insurance
on an illegal voyage, or on a contract which amounts to
maintenance, or on one for the sale of a lottery ticket, where such
sale is prohibited, or on a bill which is payable in notes issued
contrary to law. In these and in all similar cases the
consideration of the very contract on which the suit is brought is
vicious, and the plaintiff has contributed to the illegal
transaction. One of the strongest cases in the books is
Steers
v. Laishley, 6 Term 61, where the broker, who had been
concerned in stock jobbing transactions and had paid the losses,
drew a bill of exchange for the amount on the defendant, and after
its acceptance endorsed it to a person who knew of the illegal
transaction on which it was drawn, the court held that such
endorsee could not recover on the bill.
In this case, the broker himself could not recover, being a
party in the original offense against the law and his bill being
drawn for the very money which was due on the original transaction
and endorsed to a person having notice, left the endorsee in the
same situation with the drawer. Yet Lord Kenyon said in this case
that if the plaintiff had lent the money to the defendant to pay
the differences, and had afterwards received the bill for the money
so lent, he might have recovered on it. The difference between the
case decided and that put by the judge is not very discernible, as
the one or the other may affect
Page 24 U. S. 276
morals or the policy of the law. The distinction would seem to
be founded on this legal ground, that the money lent would
constitute a new consideration and be the foundation of a new
contract which could not be vitiated by a knowledge of the purpose
for which the money was lent and the bill drawn. So Toler's
knowledge of the illegal transactions of Armstrong, and that his
money was advanced to procure the delivery of goods which had been
illegally imported, could not vitiate a contract to repay that
money.
In the case of
Booth v. Hodgson, 6 Term 405, the suit
was between the original parties to the illegal transaction, and
was bottomed on it.
Supposing the opinions actually contained in the charge to be
correct, it is still contended to be liable to exception because
there is a material part of the very case which it does not
embrace. The charge, it is said, does not state what the law would
be if Toler knew, previous to the consignment, that Armstrong was
engaged in this illicit commerce.
Without entering into the inquiry whether this criticism on the
charge be well or ill founded, the Courts think it proper to
declare in explicit terms that the plaintiff in error cannot avail
himself of it in this stage of the cause.
To bring all the testimony offered at the trial of a cause at
common law, instead of facts, into this Court by a bill of
exceptions or otherwise is a practice which, to say the least, is
extremely
Page 24 U. S. 277
inconvenient. Its tendency is to convert this Court from a
tribunal for the decision of points of law into one for the
investigation facts and for weighing evidence. To look into that
testimony for the purpose of inquiring whether the judge has
omitted anything material in his charge would be to yield to this
practice and to sanction it in its most exceptionable form. If the
defendant's counsel wished the instruction of the judge to the jury
on any point which was omitted in the charge, his course was to
suggest the point and request an opinion on it. If counsel may,
without pursuing this course, spread the whole testimony on the
record and then, by a general exception to the charge, enable
himself to take advantage not only of a misdirection, but of any
omission to notice any question which may be supposed, by this
Court to have arisen in the case, such a course would obviously
transfer to the Supreme Court the appropriate duties of a circuit
court, and cannot be countenanced.
It is also contended by the counsel for the plaintiff in error
that the judge has erred in not answering fully the inquiry made by
the jury. That was in these words:
"The jury begs leave to ask the judges whether Toler must have
an interest in Armstrong's goods to constitute him a participator
in the voyage? If simply having goods on board will constitute him
such?"
The court answered as follows:
"The plaintiff's simply having goods on board would not
constitute him a participator or affect the contract
Page 24 U. S. 278
with the defendant. Being interested in the goods would."
There is much reason to believe that the first of these
questions was not understood by the jury or by the judge according
to the literal import of the words. The inquiry would seem to be
whether under any possible view of the transaction Toler could be
tainted with the guilt of Armstrong so as to affect the contract in
suit, unless he had an interest in the goods. This was probably not
the intention of the jury, because an answer to this question is to
be found in the charge. The judge had stated that if Toler was the
contriver of or concerned in a scheme to introduce these goods into
the United States or had consented to become the consignee with a
view to their introduction, these circumstances would vitiate the
contract. He had already said, therefore, that an interest in
Armstrong's goods was not indispensably necessary to make Toler a
participator in the voyage as to all the purposes of the defense.
He had stated two cases specially, either of which the jury might
consider as proved by the evidence, in which the consideration
would be unlawful, and he had said generally
"That where the contract grows immediately out of, and is
connected with, an illegal or immoral act, a court of justice will
not lend its aid to enforce it. And if the contract be in fact only
connected with the illegal transaction and growing immediately out
of it, though it be in fact a new contract, it is equally tainted
by it."
There is much reason to believe
Page 24 U. S. 279
that the jury could not have intended to put a question which
had been already answered, and that it might design to ask whether
having goods on board belonging to himself would place him in the
same situation as if interested with Armstrong. The answer of the
court would show that the questions were understood in this sense
and that answer appears to have been satisfactory to the jury.
However this may be, we think the law was correctly stated by
the court, and we cannot admit that a judgment is to be reversed
because an answer does not go to the full extent of the question.
Had the jury desired further information, it might and probably
would have signified its desire to the court. The utmost
willingness was manifested to gratify it, and it may fairly be
presumed that it had nothing further to ask.
We think that there is no error in the judgment of the circuit
court and that it ought to be
Affirmed with costs and damages at the rate of six percent
per annum.
